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CRML SHEET A niche market sliced even thinner by the housing slump

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U.S. producers of cold-rolled motor lamination (CRML) sheet continue to drive for greater market share, but the market itself is shrinking due largely to the migration of stamping companies out of the country and the overall weakness of the U.S. housing market.

Estimates on the size of the market vary widely. ArcelorMittal USA Inc., Chicago, pegs the U.S. market at about 1 million tons a year, while U.S. Steel Corp. puts it at 1 million to 1.5 million tons. These estimates include both semi-processed and fully processed material, the market's two general segments. However, others say the market is much smaller these days, depleted by the number of stampers who have moved operations out of the United States to the likes of Mexico and China. They put the market for semi-processed CRML—used in multiple motor applications by a variety of industries and end-users—at closer to 600,000 tons a year.

Most major steelmakers in the United States are capable of producing CRML, although some choose not to do so when market conditions are poor.

AK Steel Corp., West Chester, Ohio, the only U.S. manufacturer of fully processed CRML, said the current market is mixed, with some strength on the industrial side while demand for semi-processed product is weaker. The semi-processed weakness is due to the product's fortunes being closely tied to those of the U.S. housing market.

Demand for electrical devices is affected by the general level of economic activity, particularly the strength—or weakness—in housing and commercial construction. Extreme weather—hurricanes, excessively hot summers and ice storms—also play a role. The wild card for the market is energy efficiency, both in the form of consumer demand and in potential future legislation that mandates improved performance by any number of electrical devices.

Electrical steels represent one of AK Steel's more solid product lines, James L. Wainscott, chairman, president and chief executive officer of AK Steel, said recently, noting that markets for industrial applications using higher-end electrical steels are strong in the United States and abroad. "But there is some softness at the lower end of the market. There is softness in the (U.S.) housing market and in the area of distribution transformers. There are some challenges to that market from imports as well. But our overseas shipments of electrical steels will grow by 40 percent. We continue to grow that business."

ArcelorMittal calls CRML the material of choice for most electrical device applications because it provides the best combination of magnetic performance for energy efficiency and best overall system cost.

CRML steel is produced in a fashion similar to the processing operations associated with making cold-rolled sheet, U.S. Steel said. "Chemistry additions, processing variables and testing data are adjusted to provide a semi-processed material that our customers can further process to obtain a steel that will meet their required electromagnetic properties," the Pittsburgh-based steelmaker added.

The processing of the material is steelmaking to hot rolling to picking to cold reduction to annealing to temper rolling. "CRML carbon levels should be low to ultra-low for faster customer annealing," Kurt Poss, account manager of sales and marketing at ArcelorMittal, said. Alloying with elements like silicon and manganese is done for better magnetic performance, and high temper mill elongations are employed for better response in customer annealing.

"CRML is also different from plain (cold rolled) in that it is sold in a semi-processed condition, meaning that customers must provide a final anneal of the stamped laminations to fully develop the magnetic properties," Poss said. "Customers must match the magnetic performance of the steel with the specific energy efficiency requirements for the particular device. For this reason, technical support from the producer is a key component in the marketing of CRML products."

The material is usually manufactured in the form of cold-rolled strip less than 1-millimeter thick. The strip, called laminations when stacked together, forms the core of transformers or the stator and rotor parts of electric motors. Laminations might be cut to their finished shape by a punch and die, or in smaller quantities might by cut by a laser.

CRML is used in all types of electrical devices, including sub-fractional, fractional, hermetic and integral horsepower motors as well generators, ballasts and transformers. The devices are used in numerous applications in residential, commercial and industrial settings ballasts in roadway and stadium lighting; motors for dishwashers, washers and dryers, garbage disposals and range hoods; compressors and fan motors in residential and commercial heating, ventilation and air-conditioning (HVAC) applications; portable generators for emergency power; and small motors in power tools.

Purchasers of the product are primarily large producers of electrical devices, including A.O. Smith Corp., Milwaukee; Baldor Electric Co., Fort Smith, Ark; Emerson Electric Co., St. Louis; and Regal Beloit Corp., Beloit, Wis. Some companies also specialize in providing finished laminations for original equipment manufacturers, the largest of which is Tempel Steel Co., Chicago.

But the product is primarily sold to manufacturers and independent stampers, U.S. Steel said. "Very little is sold through service centers. A lot of the motors produced from CRML go into HVAC and appliance applications. Motors are feeling the drag of the current residential housing downturn," the company said.

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